Fed Study: Rate Peg Off Mark

By

Jon Hilsenrath

Nov. 5, 2013 7:23 p.m. ET

The Federal Reserve could help drive down unemployment faster if it promised to keep short-term interest rates near zero for longer than currently envisioned by officials or investors, according to a new research paper by a top central-bank staff member.

Since last year the Fed has said it wouldn't raise short-term interest rates, which are now near zero, until after the jobless rate drops below 6.5%, as long as inflation doesn't...